Let's not squander cash on training people for jobs that don't exist. Social enterprise is a trigger for economic revival

Most businesspeople can see the logic in government spending cuts. But how do you explain they're necessary to the families of those losing their jobs? Two years ago I was invited to be part of a review panel assessing the impact of a £1.5bn package set up jointly by the Department of Communities and Local Government and the Department for Work and Pensions. It was called, without irony, the Working Neighbourhoods Fund, and the money was handed out to 15 local authorities to spend as they saw fit. It was both shocking and depressing going around the country watching what was going on and what our political leaders were doing about it.

In Hastings, we saw families where three generations had never had a job. In Manchester, whole estates were bereft of a single employed person and if you dared to apply for a job, your neighbours would beat you up. The programme was set up in such a way that councils did not have to show what they were doing with the cash. But it became clear that much was being squandered—one council had used 33 per cent of the money to cut the community charge. In Sandwell, I visited a training centre that had used £1.2m from the fund, resulting in 20 people finding work. But training people for jobs that don't exist doesn't make sense.

Billions further have been spent on the Learning and Skills Council, Train to Gain and other projects giving free vocational training. Companies like mine invest in our own programmes to suit our own needs. At Roast last year I hired a theatre company to run a scheme designed to consider a restaurant service like a stage production. It was working a treat and then I made the mistake of taking up a Train to Gain offer for free training of staff that wanted NVQ Level 2 qualifications. Of course, it wasn't "free" because it was being paid out of taxes you and I had handed over.

Ministers must spend less time telling businesses what we should be doing and more time listening to us about what they should be doing. Rather than invest in often-fruitless training programmes, let's help create the next generation of entrepreneurs. Talent is going undetected because Whitehall and Westminster have not grasped successful models for viewing economic growth.

Two come to mind—micro-financing and social enterprise. In Bangladesh, the Grameen Bank has empowered people to set themselves up as businesses from farming through to weaving. A fund was set up and the default rate has been around one per cent on loans issued.

Social enterprise is a commercial model for the future. Businesses are being supported by investment funds that back talent through debt and equity finance. Investees commit to helping others and view their commercial position on wider issues of sustainability, diversity and social responsibility as well as profit. Put the two together and we have something compelling.

Banks aren't lending after the bailouts, so the onus is on government not to support or donate but to commit and to invest. For a fraction of what has been wrongly placed in projects in the past, we should build a national enterprise programme and seek the talent that could be part of the economic solution rather than the social problem. If there are no jobs, let's not pretend they exist. Micro-financing of social enterprises can be a key trigger in our revival.